Federal retirement: When, where, why?

Does your retirement game plan have an end date? Have you thought whether you will stay where you are or move to a warmer, lower-cost area? Have you figured out what you will do with 100 percent more leisure time?

A financial planner once told me that when counseling couples about retirement, he usually turns to the wife and says: “Do you realize you will soon have half the income and twice the husband you now have?” It works the other way too, and it is a sobering thought—for some.

Retirement for federal and postal workers is easier and better than for many people. For one thing, there is the defined benefit annuity. It is indexed to inflation (a full cost-of-living adjustment for CSRS retirees, a diet-COLA for FERS people). Retirees also get health insurance at the same premium as younger, healthier workers. And the government will continue to pay the lion’s share (between 71 and 75 percent) of the premium for life. And for a survivor.

Feds also have the Thrift Savings Plan (with its 5 percent government match for FERS employees). The average account balance is about $114,000.

FERS retirees are also eligible for Social Security benefits (fully indexed to inflation). Those who retire before age 62 will get a special bridge or supplemental payment until they are eligible to draw Social Security.

With all the benefits—which they earned via a long career with Uncle Sam—retirement still requires some planning. And raises lots of questions.

Do you retire in place or relocate? If so, when and why? Weather, proximity to friends and family, cost of living and taxes. For more on taxes, click here.

For many about-to-retire people, the all-important cost/coverage question is whether they should buy Medicare Part B. And what about changes Congress is considering in the retirement package. Are they likely to happen? And, if so, should you get out now?

Today at 10 a.m. on our Your Turn radio show, we’re going to talk with David Snell. He’s director of retirement services for the National Active and Retired Federal Employees. He’ll go through some of the most-asked retirement questions and tell us the answers to some of the questions you should be asking. Later in the show, Federal Times reporter Andy Medici will bring us up to speed as to what’s happening on Capitol Hill.

NEARLY USELESS FACTOID:
By Julia Ziegler
The average American spends 20 years in retirement. (Source: Department of Labor)

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